Minor child as beneficiary?

[Guest Michael Anderson]

Minor child (age 8) beneficiary for her fathers Money Purchase Plan. He only had $27 in the Plan before he died. How do you pay this out to a minor? Or does it go to her guardian (the child's mother, but not a spouse) ? Thanks

[Guest b2kates]

depends on the state; some will permit plan to pay to guardian, others require to be paid to state fund till minor is emancipated.

[mbozek]

for $27 i wouldnt worry about st laws - pay mom as guardian for the child and if you are worried about liability to the kid get an indemnification from her.

[Kirk Maldonado]

For $27, I wouldn't worry about anything. The time and cost of preparing the indemnification aren't worth your time, especially considering the fact that the kid coming after you is pretty remote.

[mbozek]

Kirk: I agree about the kid- but there may be some state/local gov. child protection agency that wants to make life difficult for the plan admin.

[Guest Michael Anderson]

I want to make this as easy as possible, but I certainly do not want trouble for us or the Plan over $27! Perhaps the indemnity would be the way to go. Thank you for all of your opinions and suggestions.

[Kirk Maldonado]

mbozek:

If I were the TPA, I'd give the governmental agency the $27 out of my own pocket.

I once had a client incur an absolutely insignificant amount of tax, with the bizarre result that my fees in preparing the form would be multiples of the amount of the tax. (Also, I wasn't particularly excited about preparing the form.) I told the client that if the IRS comes after them for that tax, I'll pay it out of my pocket; I'd rather do that than spend the time filing out the form.